New York Real Estate Lawyer Blog

August 5, 2012

Does the Estate Owe Money in New York– Surrogate Court Bonding.

Surrogate Courts in New York may require a probate bond – also called an “executor bond,” an “administrator bond,” or a “trustee bond” – when an individual is appointed to handle the distribution of a deceased person’s estate. The bond acts as a guarantee that the estate’s debts will be paid and the assets will be distributed properly. Before a bond will be issued, bond companies will review the credit history of the person administering the estate to assess their risk in issuing the bond.

Depending upon the facts and circumstances, the Surrogate Court sitting in Rockland, Dutchess, or Westchester County, New York, may require a bond if the gross value of the probate assets for the estate is $30,000 or more. N.Y. Surrogate’s Court Procedure, § 801-1(a) and § 1301-1. The amount of the bond required is determined by the court, but is generally equal to the value of the property in the estate, including rents on real property for 18 months and the “probable recovery” of any lawsuit being prosecuted by the fiduciary of the estate. N.Y. Surrogate’s Court Procedure, § 801-1(a). The size of the bond will depend upon the number of “creditors” and the claimed amount due.

The premiums on the bond are paid from the deceased person’s estate. Bond premiums are generally paid annually until the estate is settled, i.e. all of the property has been distributed. In your will, you may direct that the court not require a bond. By doing this, you will save your estate money on bond premiums, but there will no longer be a third-party guarantee ensuring that your estate is properly distributed.

August 1, 2012

New York State Thoughts on Same Sex Couples and the Obstacles to Equal Rights in Parenting.

by Peter Klose

The New York Times recently ran an article highlighting the myriad of legal obstacles gay couples face in raising a family together.

For example, although many states allow a second mother to be listed on a child’s birth certificate, when a same sex married couple travels to a state that does not recognize their union, the relationship established by the child’s birth certificate may not be recognized (despite the general principle that state courts give full faith and credit to other states’ judgments).

This failure to recognize the same sex parent-child relationship can have widespread consequences. For example, an unrecognized parent may not have authority to make medical or other decisions for the child, and in the event of the legally recognized parent’s death, the other spouse would not necessarily be granted guardianship of the child.

July 30, 2012

FB, Linkedin, Social Profiles and death in New York and on the internet.

by Peter Klose

So maybe your will was drafted a while ago or you are just starting to put together your important papers in anticipation of getting a new will. You’ve considered all the basics: who gets the house, the cash and stocks, and who will take care of your children, but have you thought about what will happen to your social media accounts when you die?

Most social media sites will not give your account information to anyone in an effort to protect your privacy, but allow certain people to cancel your account upon your death. For example, Facebook has a policy of “memorializing” deceased users’ accounts, and permits only confirmed friends to see the deceased user’s profile and post on their page. Facebook allows immediate family members to request the removal of a deceased user’s account, but it will not provide login information to anyone. Twitter has a similar policy allowing family members or other “authorized” persons to deactivate a deceased user’s account, but will not provide login information to third parties. LinkedIn also allows family members or other survivors to close an account upon satisfactory verification of a user’s death. On the other hand, email providers like Gmail, allow authorized persons to access the deceased user’s email account upon a lengthy verification process, including obtaining a Court Order directing Google to disclose account information.

In New York earlier this year, Assemblyman Felix Ortiz introduced legislation that would allow users to appoint an “online executor” in their will providing them with the authority to cancel social media accounts upon the user’s death. The Committee on Judiciary is currently considering the bill. Other states have enacted similar legislation in an effort to bring probate laws into the 21st century.

July 23, 2012

A Decision Heard ‘Round the Legal World—Fischer & Mandell LLP v. Citibank.’

by Peter Klose

In February 2011, the Court of Appeals for the Second Circuit (including New York) handed down a decision that should have every attorney dotting their “I’s” and crossing their “T’s.” In Fischer & Mandell LLP v. Citibank, 632 F.3d 793 (2d Cir. 2001), the court affirmed summary judgment against a law firm who deposited a client’s check into a bank, and disbursed the funds as requested by the client before the check cleared the account.

The facts were as follows: in January 2009, plaintiff-appellant, Fischer & Mandell LLP, received from a new client what appeared to be an official Wachovia Bank check. Id. at 795. The check was made payable to the firm, and the firm was advised that it represented partial payment of a debt owed by another entity to the client. The firm then deposited this check for $225,351 into its account at defendant-appellee, Citibank. In the usual case, if there is enough money in the account to cover the check, the bank will make the funds available immediately, before the check clears-that is what happened here. Id.

The client then requested two wire transfers of a portion of the funds-one to South Korea, and then next to Canada. After both transfers were complete, the Federal Reserve Bank returned the check as dishonored and unpaid. Id. at 796. A Citibank representative then telephoned the firm to advise them of the counterfeit check. Citibank then charged back to the trust account the amount of the check and a $10 returned check fee, resulting in an overdraft. Id. Next, Citibank debited an amount necessary to satisfy the overdraft from a money market account the firm had at Citibank.

July 23, 2012

STAR Exemptions in residential New York Real Estate transactions.

by Peter Klose

In your search for a home in New York State (Rockland, Dutchess, Putnam, Ulster, Westchester County), you may have come across listings that say that the annual taxes include STAR – what does that mean for you as a potential homebuyer?

The STAR exemption, which is the New York State School Tax Relief Program, provides partial tax exemptions for homeowners that live in their home as a primary residence and meet certain income requirements. So, if you see a real estate or multiple listing that says the taxes “include STAR,” it likely means that the taxes listed have been reduced to reflect this exemption (i.e.reduced). However, it is important to realize that the exemption is specific to the individual homeowner, and just because the previous owner got the STAR exemption, it does not mean that you will too, unless you meet the guidelines and file your application by the deadline.

There are two types of exemptions under STAR: (1) “Basic Star” which applies to resident homeowners whose income combined with their spouse is $500,000 or less and exempts the first $30,000 of the full assessed value of the home from school taxes; and (2) “Enhanced Star” which applies to resident homeowners age 65 and older with an income of $79,050 or less and exempts the first $62,200 of the full assessed value of the home from school taxes. There are limits, however, on the amount of savings a homeowner can get from the STAR exemption.

July 11, 2012

Common Problems with Wills, and How To Ensure Yours is Valid in New York State.

by Peter Klose

Lets face it-once you are gone, you cannot come back and explain what you did in your will and why you did it. The goal is to make a bulletproof will that will save your family heartache, the stress of court proceedings, time, and money. There are certain key points to follow to ensure this.

First, if your will is not validly executed, the will is ineffective. You will be deemed to have died intestate, thereby giving up your right to distribute your assets as you wish. Therefore, it is very important to make sure that your will has been properly executed. In New York, this requires certain formalities, which include your signature and the signature of two disinterested witnesses.

Second, you should explain in your will what you are doing and why you are doing it. If you make a peculiar bequest, one that you know your family will fight about down the line, it is helpful to explain why you did this and your intention behind it. This will ward off most claims of undue influence or lack of capacity. At times, I have advised people to leave a separate letter drawn in your own hand explaining things.

June 23, 2012

Forced Place Insurance Forces Homeowners Closer to Foreclosure

by Peter Klose

Forced place insurance is an insurance policy taken out by a lender or creditor when a borrower does not carry insurance on an asset. For example, if homeowners with a mortgage do not carry property insurance, the bank servicing the mortgage will buy a policy on the homeowner’s behalf and send the bill to the homeowner. This is done to protect the bank that owns the loan.

Ironically, the reason why many homeowners do not get insurance in the first place is because they cannot afford to do so. Under the current system, companies providing forced place insurance pay commissions to banks for using their products. Many of the largest financial institutions, including Bank of America and JP Morgan Chase, also own forced-place insurance subsidiaries – generating them even larger profits. See HuffingtonPost. Clearly, banks have a financial incentive to choose the most expensive policy or to require excessive or duplicative levels of coverage: the higher the coverage, the bigger the commission. The American Banker found that the cost of bank-imposed policies could reach 10 times the normal market rates. Therefore, homeowners are not only forced to pay for unnecessary insurance that they cannot afford, but are also pushed closer to foreclosure by doing so.

In New York, hearings were recently conducted to investigate why the cost of this type of insurance has more than tripled since 2004, with premiums rising from $1.5 billion in 2004 to $5.5 billion in 2010. The status of two insurers, Assurant and QBE Insurance, who together control about 90 percent of the market for forced-place insurance, is also being scrutinized. See New York Times.

June 23, 2012

Paying for Peace: Why Surveys Are Helpful When Purchasing Real Estate in New York

by Peter Klose

One of the most stressful, but enjoyable moments in your life is when you purchase a house. Most would describe it as an experience like no other. Most would also agree that just going out and finding a plot or house you like and immediately buying it is ill advised. Since there are many things that could be wrong, getting a land survey before you purchase the land is the best bet.

Land surveys serve many purposes. The survey shows the boundary measurements of the land to make sure that the plot you think you are buying is actually what you are buying. The survey can tell you what lies on your property and what falls out of your property line. It also shows features of the property such as trees, buildings, fences, sidewalks, driveways, and the like.

A land surveyor can also be very helpful when purchasing a piece of real estate that you hope to eventually build on, as they are often familiar with zoning and building regulations. Further, if you plan to subdivide the land, a survey will provide the necessary measurements to determine whether that is possible for you to do. Essentially, the surveyor is able to take into consideration what your objective is with the land, and reach conclusions that will either make you want to go forward with the transaction or realize that you almost just entered into a very bad deal.

May 24, 2012

Taglines and Trademarks: First in Time Gets First in Tag (Line)

by Peter Klose

Everyone knows a tagline or two-Nike’s “Just Do it”; McDonald’s “I’m Loving It”; Cotton’s “The Fabric of Our Lives”; the list goes on and on. These taglines are essentially a branding slogan used to market or advertise a given good or service. The purpose of a tagline – and a good tagline will achieve this purpose – is to create a phrase that will help consumers remember your product. Some taglines even speak to the nature of their product: if you are going to Burger King, you are going to remember that you can have it your way; if you choose Allstate as your insurance company, you are going to remember that you are “in good hands.”

But how does one keep from having their tagline stolen from underneath them? The answer is not novel, nor it is necessarily difficult, if you are the first to “coin” this term, you trademark it. Per the United States Patent and Trademark Office (“USPTO”), trademarks protect words and symbols that distinguish products or services from those of other sellers or manufacturers and indicate the source of the product or service. Essentially what this means is that your tagline must be very specific to your company; it cannot be so general as to encompass many goods or products. This is because if the tagline is given trademark protection, other companies are foreclosed from using such phrases in their taglines.

The steps to obtain trademark protection are simple, but very particular. First, one who seeks to have their tagline trademarked must make certain that their idea does not conflict with an existing slogan that has been trademarked. There is a free device on the USPTO website called the “Trademark Electronic Search System” that can be used to conduct this search. Next, you must write a description of your tagline linking it to your good or service. It must be specific enough to set your tagline apart from others-be sure to include your slogan in standard size as you are not allowed to trademark any specific color, font, font size, or design for your tagline. Third, you file this application with the USPTO. You will receive a number to use as your receipt. Then, you wait to receive a response to your application from USPTO.

April 23, 2012

Trademarks and the Internet—More Related Than One Would Think!

by Peter Klose

Today, a vast majority of us use the Internet at least once a day. In fact, if you are reading this blog, you have just proven my point! Using the Internet has only gotten easier with search engines like Google and Yahoo. So naturally, from a business standpoint, it is smart to get as much Internet exposure as possible to market your product!

If you are just starting out, you want to pick a name that has terms that are already widely searched. For example, “[y]ou’d rather have a name like Moviefone than one like Fandango, because that is what someone is going to plug into a search engine. . .” suggests Allen P. Adamson, managing director of Landor Associates, a brand design firm. See New York Times.

But what Mr. Adamson also points out is that you will likely be challenged on that name-namely by gigantic corporations looking to put a financial burden on small companies trying to patent simple terms. Id. Professor Barton Beebe at New York University Law School who specializes in intellectual property law explained it as such: “If they can’t win in the marketplace, they try to soften them up with legal fees and distract them. Even if they lose the case, it’s a Pyrrhic victory because the small company has wasted so many resources.” Id.